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Lawmakers consider putting transportation funding before voters

ST. PAUL — One thing all sides seem to agree on is Minnesota’s transportation system needs more funding.

Sen. Scott Dibble, the Democratic chairman of the Senate Transportation Finance Committee, in June proposed a constitutional amendment asking voters if they want to take sales taxes already collected on auto repairs and replacement parts and dedicate the funds to highway construction and upkeep.

Hoping a compromise would break gridlock on the issue, Dibble took part of the idea from Republicans in control of the House, with whom he had clashed all session over a package to fund transportation needs for the next decade. His proposal also includes a modified gasoline-tax increase, which Democrats pushed.

As lawmakers head into the 2016 session on March 8, transportation funding again is on the table; Gov. Mark Dayton and top legislative leaders say they’re open to Dibble’s idea of putting the question to voters next fall.

“We are talking about not getting into the biennial political food fight in the general fund for transportation services,” Dibble, D-Minneapolis, said. “You need long-term planning to get these projects going and cover major equipment and investment costs. If your funding streams are volatile, transportation will always come up short.”

The state’s road and bridge fund was established via a constitutional amendment in 1912, when voters authorized the state to collect taxes every year to construct and repair roads and bridges. In 2006, Minnesota voters approved a constitutional amendment requiring all taxes collected on the sale of vehicles go specifically toward transportation.

That amendment, phased in over five years, directed about $300 million in new money each year into transportation. It specifically allocated 40 percent of the money for mass transit, with the rest going for roads and bridges.

Last year, Dayton and his fellow Democrats in the Senate pushed for a 16-cent-a-gallon increase in the state’s gas tax. But Republicans balked at the idea of raising the state’s gas tax, and instead proposed raising $7 billion over 10 years for roads and bridges through the budget surplus, borrowing and diverting the auto part and repair taxes into highway funds.

Unable to reach an agreement, lawmakers tabled discussion.

“I know the Republicans really want to get a transportation bill and they don’t want to raise the gas tax,” Senate Majority Leader Tom, D-Cook, said. “The Senate position is we’ve already taken a vote on the gas tax and we have it in conference committee and we are going to fight for it. It’s dedicated funding.”

Republican House Speaker Kurt Daudt of Crown said the GOP members are just as sour on the idea of raising the gas tax as they were last session.

“They want to raise a new tax, the highest gas tax increase in the history of the state, to pay for a core function of government?” Daudt said. “To me that doesn’t make a bit of sense.”

Democrats criticized Republican’s plan last year, diverting the sales tax on auto parts and repairs from the general fund, because future legislatures could change it.

“I’m open to putting it on the ballot,” Daudt said. “One of the criticisms of our plan by Democrats has been, ‘Well, this isn’t really dedicated. It could be taken away.’ I don’t really believe a future Legislature would take it away. I think we can put in place that funding mechanism in statute and I believe it would stay there, but if that brings Democrats on board to our plan, I’m absolutely open to talking about. I believe the public would support it.”

Dayton is open to the idea of the amendment as well, but he’s worried it won’t generate enough money to solve the problem. If approved, the proposed amendment would dedicate about $300 million per year to transportation projects, and Dayton’s administration has identified more than $6 billion in transportation funding needs over the next decade.

“I think some of those general fund revenues, sales tax, could be used justifiably for transportation,” Dayton said. “But that’s permanently removing those revenues from the general fund. So, first of all, it’s going to deplete the general fund for years ahead. And secondly, it’s not going to be close to what the needs are.”

Bakk is particularly concerned about diverting general fund dollars into a constitutionally dedicated pot of money. The state is projecting a $1.2 billion budget surplus next session, but with inflation included on the cost of running government, Bakk said there’s not much wiggle room projected down the road. If the money stays in the general fund, it could be spent on anything. During the 2006 amendment debate, groups like Education Minnesota opposed the ballot initiative, arguing it could divert money from schools and other programs.

“I think it’s a little unfair to use general fund money for transportation,” Bakk said.